The securities and investment industry is concerned with the management of money through the purchases and sales of assets which have one or more of the properties of security, earnings, or potential for gain in value. Assets include stocks, bonds, options, futures, currencies and the like. Effective management of information relating to these assets is a principal function of the financial industry. As the volume of data has increased, the industry has evolved from hand written records in ledgers to computer processing of the data.
The data may be characterized by three basic concepts, an issue, a lot, and a transaction. Examples of issues are X corporation common stock or 6 month US Treasury Bill issued Jan. 5, 1988. A lot (or position) is any currently held issue. Depending on accounting rules in force for a particular portfolio, there may be many lots (or purchases) of one single issue, or all purchases may be combined into one lot. Examples of lots are 10,000 shares of X corporation or $50,000 of 6 month US Treasury Bill of Jan. 5, 1988. A transaction is the purchase or sale of a lot or some other event which causes a change to a lot, e.g. a stock split or maturation of a bond.
The computer systems of the prior art use the conceptual entities of issues, lots, and transactions as the storage vehicles for security related computer systems. All of the attributes and properties of a particular issue, lot, or transaction are stored together in one place. This is exemplified by the file "TEMPO" in column 34 of U.S. Pat. No. 4,566,066 issued Jan. 21, 1986 to F. C. Thomas. This follows logically from the conventional records used before computers wherein all the information about a particular issue, lot, or transaction was recorded together in one place, for there would be no point in distributing the information to different pages of a ledger.
An example of the prior art use of computers to process the data is shown in FIGS. 1-5 for the sample case of a portfolio management system for a municipal government which is restricted by law to the purchase of government guaranteed bonds and which may not sell any lot at a loss.